How to turn $100 into $9.6 Billion

Elizabeth, I agree, everyone's "investment style" is a very personal thing, and I think it's good in general for people to go with a style that suits their personality....

I've mentioned my good friend who's a day-trader.... We meet at least once a week and discuss stocks, physics, academia (we have all these experiences in common).... :)

I don't try to make him a long-term investor, and he doesn't try to make me a day-trader..... I actually find it fascinating discovering other investment approaches! I do believe that more than one approach works.... :)

> But, what's going on when earnings are
> strong and stocks in that sector all trade
> down after hours. Any explanations or
> comments, anyone??

Here's what I reckon....

Sometimes expected earnings growth is already built into the price of the stock. (This is especially true for stocks with a high P/E -- price/earnings ratio.... The P/E is usually given in stock listings in newspapers or online....) Investors are already *expecting* a certain level of earnings growth each year....

It is then possible that earnings can still grow, but not as high as expected. In that case, the price could go down, since the stock could have been *over-valued*!

For example, maybe many investors are expecting 30% growth in earnings one year, and this has been factored into the price of the stock already (a high P/E is a sign of this sort of thing)....

However, let's say the company releases its financial results, and growth was only 20%. In that case, the price could go *down*, because the current price could be too *high* given the company's performance....

Dien Rice